U.S. president Donald Trump said on Monday that he would immediately resume import taxes on imports of metals from Brazil and Argentina.

"Brazil and Argentina have been leading the sharp devaluation of their currencies," Trump said in a tweet. This is bad for our farmers. Therefore, from now on, I will restore import taxes on all steel and aluminum products sold to the United States from these countries and regions. "

According to Brazilian media reports, Brazilian President Bosonaro said on the same day that he would discuss the matter with Brazilian economy Minister Guedes and would speak directly to Trump if necessary.

After his speech, US stocks came under pressure, but the steel sector received a boost. The Dow closed down 268.37 points, or 0.96%, at 27783.04, the S & P fell 27.11, or 0.86%, to 3113.87, and the Nasdaq fell 97.48, or 1.12%, to 8567.99. Us stocks and steel stocks rose generally. American Iron and Steel (X) closed 4.2% higher than AKS Steel Holdings Group (AK).

WTO faces a cliff crisis

In March last year, Trump announced that he would impose 25% and 10% tariffs on imported steel and aluminum products, respectively, saying that imports of steel and aluminum products endanger the "national security" of the United States. Some countries, including South Korea, Brazil and Argentina, subsequently agreed to impose quota restrictions on steel or aluminum exports to the United States in exchange for tariff exemptions. The Trump administration's decision to impose tariffs on steel and aluminum products has met with strong international opposition. A number of economies, including the European Union, Canada and Mexico, have taken counter-measures against US steel and aluminum tariffs and complained to the dispute settlement mechanism of the World Trade Organization.

But unfortunately, people familiar with the matter revealedWTO appellate body will cease operation from December 11Because one of the remaining three members plans to leave office.

Thomas Graham, chairman of the WTO's powerful appellate body, told officials this month that he would not agree to hear trade disputes after his term ends on December 11, according to people familiar with the matter. Traditionally, members of the Appellate body whose term of office expires can continue to hear outstanding disputes.

The WTO crisis was caused by the United States blocking the appointment of new members to the appellate body. The Trump administration says the appellate body goes beyond its terms of reference and violates U. S. sovereignty. When the terms of office of Graham and another Appellate body member expire on December 11th, the Appellate body will not have sufficient members to decide new cases. But with Graham's resignation, it also means that pending appeals will be in a legal dilemma.

In addition to steel tariffs aimed at South America, there are two tariff warnings.

• Trump's latest tariffs worry the market that the move will set a precedent and endanger the foreign exchange market

In response to Trump's decision to restore import taxes on imports of metals from Brazil and Argentina, Cowen analyst Chris Krueger said US President Donald Trump's decision to resume tariffs on Brazilian and Argentine exports showed that "no one is safe in front of customs officers." "

The resumption of tariffs also highlights the problems the WTO will face next week, when its appellate body will cease operation from December 11, when the dispute settlement system will be paralyzed.

Krueger wrote that actions against Brazil and Argentina, as well as past threats of tariffs on Mexican exports due to immigration and tariffs on Turkey due to currency devaluation, "further confirmed the risk of deal default (and the possibility of losing face) in dealing with the Trump administration". "these tariffs are not even under the guise of 'national security'," Krueger added. The move "is a preparation for retaliation and may reshape exchange rate relations and the rules of the game in the foreign exchange market".

Although "the importance of restoring tariffs to Brazil and Argentina is relatively low," Vital Knowledge's Adam Crisafulli wrote in a separate report. But investors worry that this could set a precedent (and be wary of Trump's simple and crude understanding of the relationship between global foreign exchange markets and central bank policy). "

Crisafulli added: "if Trump is about to launch tariff action against countries accused of devaluing their currencies, there may be more targets. At the same time, he pointed out that Trump is "concerned about November 2020 and knows the need to ensure that the economy remains healthy for at least another 11 months", which means that any trade move "should remain small".

Analysts believe this is the first time Mr Trump has explicitly linked tariffs to exchange rate movements, marking a possible new phase of his trade policy that uses the foreign exchange market as a battlefield. This raised concerns in the market, a move that would set a precedent and endanger the foreign exchange market.

• Us Trade Representative: the United States will consider raising tariffs on EU goods after the WTO ruling

After WTO said on Monday that the EU had not fully eliminated the negative impact of subsidies for Aircars, the Office of the United States Trade Representative issued a statement saying that the United States would start a process to assess the imposition of tariffs, which could involve more EU products.

"in view of today's report and the lack of progress in the efforts of both sides to resolve the dispute, the United States is taking action," the Office of the United States Trade Representative said. "

The Office of the United States Trade Representative will issue a federal bulletin notice on the program later this week.

• The United States plans to impose tariffs on $2.4 billion of French goods in response to digital taxes

According to the Office of the United States Trade Representative, France's Digital Services tax (DST) discriminates against American companies and is inconsistent with existing international tax policy principles. In response to the French digital tax, the agency proposed tariffs on 2.4 billion dollars of French goods and considered investigating Italy, Turkey and Austria on the digital tax.

According to the Office of the United States Trade Representative, France's digital services tax discriminates against American companies and is inconsistent with existing international tax policy principles, which is an unusual burden for affected American companies. Specifically, French DST discriminates against American digital companies, such as Alphabet Inc-CL C, Apple Inc, Facebook Inc and Amazon.Com Inc.

"Today's decision by the Office of the United States Trade Representative sends a clear signal that the United States will take action against digital tax systems that discriminate against or otherwise unduly burden American companies," said Robert Lightshitzer (Robert Lighthizer). In fact, the Office of the United States Trade Representative is considering whether to launch a 301 investigation into digital services taxes in Austria, Italy and Turkey. The Office of the United States Trade Representative focuses on combating growing protectionism in EU member states, which is unfairly directed at US companies, whether through the imposition of a digital services tax or other measures aimed at leading US digital services companies. "

The office of the US trade representative said that France's DST was unreasonable, discriminatory and a burden on US trade. It proposed additional tariffs of up to 100 per cent on some French products, including a list of 63 products that could be subject to tariffs, with a total trade volume of about $2.4 billion.